The Chinese government is forcing blockchain companies to censor content, store users’ identity data, and share it with authorities in a bid to support “orderly development.”
As part of a new registration system, the Cyberspace Administration of China (CAC) will require users of blockchain platforms to submit their real names, national IDs, and even telephone numbers, Reuters reports.
The CAC will begin imposing the rules next month. Any blockchain company found not to be recording the identities of users or allowing content to be censored will face punishment via fines or prosecution.
China has already effectively declared victory in its war on cryptocurrency, which began when the government outlawed initial coin offerings and cryptocurrency exchanges in September 2017.
Back then, the Renminbi was featured in over 90 percent of Bitcoin trades. By July last year, China‘s central bank presented data showing less than one percent of global Bitcoin trade used the Renminbi.
Still, research indicates that major cities like Shanghai, Henan, Guangzhou, and Shenzhen have all backed blockchain projects, the latter of which established a $72 million fund to encourage growth.
The running narrative of “Bitcoin bad, blockchain good,” has certainly kept the cogs turning for China‘s distributed ledger industry. Baidu, Tencent, and Alibaba are all heavily invested in various blockchain companies operating around the world.
But if the future of China‘s blockchain sector is built on enforced censorship and recording the identities of users, one can’t help but consider whether its government has missed the point entirely.